Analysis & Opinion

MILAN (Reuters) - Italy's Eni (ENI.MI) announced plans on Monday to sell down further its stake in Portuguese energy company Galp Energia (GALP.LS) as the oil and gas major presses ahead with plans to focus cash on upstream development.

State-controlled Eni said it will sell a stake of up to 6 percent in Galp, worth around 607 million euros ($787 million) at current market prices, by accelerated book building.

At the same time it will launch around 1.1 billion euros of senior unsecured bonds exchangeable into Galp Energia ordinary shares. A source close to the operation said the bond was equal to a stake of up to around 8 percent in Galp.

Eni, which has already agreed to sell its Galp stake in phases, earlier this year sold a 5 percent stake to reduce its overall holding to just over 28 percent.

That stake was placed at a price of 14.25 euros per share compared to a current market price of 12.2 euros.

Chief Executive Paolo Scaroni has on several occasions said the company does not want to remain invested in listed companies it does not control.

Eni has already sold down its stake in domestic gas transport operator Snam (SRG.MI) in a move that cut its debt by around 14.7 billion euros as it channels resources into its oil and gas upstream business.

Earlier this year Scaroni said he expected the sale of the whole 33.34 percent stake in Galp to fetch around 3.5 billion euros compared with the 900 million euros the group had originally paid.

In a separate statement, Eni said it had agreed to push back to the end of 2013 a call option Portugal's Amorim Energia has on a 5 percent stake in Galp held by the Italian company.

Amorim, which holds around 38 percent of Galp, has a right of first refusal on a further 5.34 percent of Eni's Galp stake.

Amorim is led by Portuguese entrepreneur Americo Amorim with participation by Angola's state oil company Sonangol.

Eni, which has committed to sell its Galp stake by the end of 2013, said in October it had received a lot of interest for Galp but added the offers had not meet its expectations.